08:36 AM EST, 11/06/2025 (MT Newswires) -- There were no "fireworks" at the Bank of England on Thursday, said Sanjay Raja, Deutsche Bank's chief United Kingdom Economist.

Despite a favorable set of data, the BoE's Monetary Policy Committee held Bank Rate at 4% -- breaking the cycle of quarterly MPR rate cuts, matching market and street expectations, noted Raja.

However, this was no ordinary decision. Thursday's decision was tighter than expected, with four members of the MPC pushing for a quarter-point rate cut, with Governor Andrew Bailey's deciding vote tilting the decision towards a 'hold', stated the economist.

The BoE's new and revamped guidance, however, told Deutsche Bank three things. One, the overall MPC is putting more weight on downside risks to growth as opposed to upside risks to inflation -- a major shift from the August decision.

Two, while the MPC omitted the word 'careful', it maintained that rates would move gradually in a downward direction: "if progress on disinflation continues, Bank Rate is likely to continue on a gradual downward path."

Three, Governor Bailey explicitly noted that rather "than cutting Bank Rate now, I would prefer to wait and see if the durability in disinflation is confirmed in upcoming economic developments this year." The explicit nod towards data this year puts increased emphasis on the next two rounds of labor market and inflation data -- this will be key for a rate cut late in the year.

Deutsche Bank continues to think that the MPC will cut Bank Rate once more this year -- taking Bank Rate to 3.75% by year-end. It also maintaina that Bank Rate will likely settle closer to 3.25% by summer next year.

The big question now is whether there is enough dovish momentum in the data to back a faster reduction in Bank Rate over the first half of next year, according to Raja.